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Plywood Exporter Seeks Attorneys' Fees From US in Evasion Case

A hardwood plywood importer that won its 2022 case against an affirmative evasion finding is seeking payment of its court expenses and attorney’s fees from the U.S. government. The importer on July 8 said CBP’s investigation against it had never been supported by substantial evidence and was instead the result of “bad acts” and “various violations of federal regulations” by the government (Interglobal Forest v. U.S., CIT # 22-00240).

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Further, the trade court should apply a “special factor” to increase the rate of compensable attorney pay higher than $125 an hour, importer Interglobal Forest said. It said the court has found in prior cases that “customs law is a specialized practice area,” and that this case in particular needed understanding both of the Enforce and Protect Act and antidumping duty law.

Its attorneys “had the required depth of knowledge in these fields, and where novel issues and new case law needed to be addressed, they conducted focused research in this very specialized area of law,” the importer said. This “warrants a significant enhancement well above the $125 per hour statutory fee,” it said.

The importer also asked to be reimbursed for its paralegal costs.

To be able to collect attorney fees and expenses from the government, Interglobal said, a plaintiff must be able to show both that it prevailed in its case and that “the position of the United States,” meaning both the agency action at the center of the suit and the government’s litigation position, “was not substantially justified.”

First, it argued that it had “prevailed” in the trade court. To “prevail,” a party must succeed “on any significant issue in litigation,” not see “success on each issue sued,” it said. After a voluntary remand to consider Royal Brush (see 2312150027), the Court of International Trade in April upheld CBP’s new negative evasion finding regarding Interglobal and three other importers, saying there was no longer a “substantive challenge” to the result (see 2404080020).

And second, it argued that CBP’s position had never been “”substantially justified.”

Interglobal claimed that the investigation’s petitioner provided alleged video evidence of evasion that CBP later ruled was unclear and inadequate. So, “on the eve of CBP’s statutory deadline for concluding its investigation,” the agency “adopted a new theory,” arguing with the backing of the Commerce Department that Vietnamese two-ply hardwood plywood was covered by orders on Chinese-origin plywood, it said. It later reversed this decision, it reiterated.

The importer provided a chart of “bad acts” it alleged the government had committed during the investigation. It argued that CBP launched the inquiry on the basis of the “debunked” videos and failed to provide the importer notice. The latter resulted in the “illegal assessment of antidumping and anticircumvention duties totaling 206%,” despite a scope referral pending before Commerce, it said.

These actions also “severely damaged [Interglobal’s] business and reputation,” specifically by liquidating a number of hardwood plywood entries prematurely, the importer claimed.

Meanwhile, the United States’ litigation position included some of the unsubstantiated justifications provided by CBP in its initial determination, it said.